CAM Cameron International Corp.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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2011 Proxy Statement and
Notice of Annual Meeting
of Stockholders

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To the Stockholders of Cameron International Corporation:

        You are cordially invited to attend the Annual Meeting of Stockholders of Cameron International Corporation to be held on Tuesday, May 3, 2011, at Cameron's corporate headquarters, 1333 West Loop South, Suite 1700, Houston, Texas, commencing at 10:00 a.m.

        At this year's Annual Meeting, you will be asked to vote on a number of items more fully addressed in our Notice of Annual Meeting of Stockholders, including the election of directors, two compensation plans and our executive pay practices.

        We know that most of our stockholders will not be attending the Annual Meeting in person. As a result, Cameron's Board of Directors is soliciting proxies so that each stockholder has an opportunity to vote on all matters that are scheduled to come before the meeting. If you do not plan to attend, please vote your shares by Internet, by telephone, or, if you received our proxy material by mail, by returning the accompanying proxy card, as soon as possible so that your shares will be voted at the meeting. Instructions on how to vote can be found in our Proxy Statement.

        Thank you for your continued support of and interest in Cameron.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

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CAMERON INTERNATIONAL CORPORATION

PROXY STATEMENT

for the

ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 3, 2011

        This Proxy Statement, and the accompanying proxy/voting instruction card ("proxy card"), are being made available to stockholders of record of Cameron International Corporation ("the Company") by the Company's Board of Directors ("Board") in connection with its solicitation of proxies to be used at the Company's 2011 Annual Meeting of Stockholders, scheduled to be held on May 3, 2011, or any postponements and adjournments thereof ("Annual Meeting" or "Meeting"). This Proxy Statement and any accompanying proxy card were first made available to stockholders beginning March 24, 2011.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING —————

Why am I receiving these materials?

        A Notice of Annual Meeting of Stockholders or Notice Regarding the Availability of Proxy Materials has been provided to you because the Board of Directors is soliciting your proxy to vote your shares at the Company's upcoming Annual Meeting.

What is the purpose of the Annual Meeting?

        At the Meeting, our stockholders will act upon the matters outlined in the Notice of Meeting on the cover page of this Proxy Statement, namely:

1.

To elect three director nominees to our Board of Directors as Class I Directors;



2.

To ratify the appointment of Ernst & Young LLP as the Company's independent registered public accountants for 2011;



3.

To approve the Company's 2011 Management Incentive Compensation Plan;



4.

To approve an amendment to the Company's 2005 Equity Incentive Plan to change the option term from seven to ten years;



5.

To conduct an advisory vote on the Company's 2010 executive compensation;



6.

To conduct an advisory vote on the frequency of future advisory votes on executive compensation; and



7.

To transact any other business that may properly come before the Meeting.

Why did I receive a Notice Regarding the Availability of Proxy Materials in the mail regarding the Internet availability of proxy materials instead of a full set of printed proxy materials?

        Pursuant to Securities and Exchange Commission ("SEC") rules and regulations, we have provided a Notice regarding Internet access to our proxy materials, including our 2010 Annual Report, to you because you have not elected to receive our proxy materials by mail. The Notice contains instructions on how you can access our proxy materials over the Internet as well as on how to request a printed copy. If you received such a Notice, you will not receive a printed copy of our proxy materials unless you request one.

        If you wish to receive our proxy materials by mail in the future, you can so choose by following the instructions in the Notice Regarding the Availability of Proxy Materials. Your election to receive proxy materials by email will remain in effect until you terminate it.

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        Stockholders who hold their shares in "street-name", that is other than directly in their own names, but in the name of a bank, broker, or other holder of record, will receive a Notice Regarding the Availability of Proxy Materials directly from their bank, broker, or other holder of record.

Who is entitled to vote at the Meeting?

        Owners of shares of the common stock of the Company ("Common Stock") at the close of business on March 11, 2011, (the "Record Date"), are entitled to vote at and participate in the Annual Meeting.

        Participants in the Company's retirement savings plans, the Company-sponsored Individual Account Retirement Plan, the Nonqualified Deferred Compensation Plan, and the Deferred Compensation Plan for Non-employee Directors (collectively, "Retirement or Deferred Compensation Plans" or "Plans") may give voting instructions with respect to the Common Stock credited to their accounts in the Plans to the Plans' trustees who have the actual voting power over the Common Stock in the Plans.

What are the voting rights of holders of Common Stock?

        Each outstanding share of Common Stock will be entitled to one vote on each matter to come before the Meeting.

What is the recommendation of the Board of Directors regarding the proposals?

        Please see the information included in this Proxy Statement relating to the proposals on which you will vote. Our Board unanimously recommends that you vote:

1.

"FOR" each of the director nominees named in the Proxy Statement;



2.

"FOR" the ratification of the appointment of Ernst & Young LLP as the Company's independent registered public accountants for 2011;



3.

"FOR" the approval of the Company's 2011 Management Incentive Compensation Plan;



4.

"FOR" the approval of an amendment to the Company's 2005 Equity Incentive Plan to change the option term from seven to ten years; and



5.

"FOR" the proposal to approve, on an advisory basis, the Company's 2010 executive compensation.

        Our Board has not taken a position on how frequently our stockholders should have the opportunity to participate in future advisory votes on executive compensation, preferring instead to allow our stockholders to select, on an advisory basis, either one, two or three years.

What happens if additional matters are presented at the Meeting?

        If another proposal is properly presented for consideration at the Meeting, the persons named in the proxy card will vote as recommended by the Board or, if no recommendation is given, these persons will exercise their discretion in voting on the proposal.

How can shares be voted?

        Shares of Common Stock can be voted in person at the Meeting or they can be voted by proxy or voting instructions can be given, in one of three ways, by:

•

Internet



•

telephone



•

mail

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The instructions for each are on the proxy card, in the Notice Regarding the Availability of Proxy Materials, or on the voting form enclosed with the proxy from the trustee, bank or brokerage firm.

How will votes be counted?

        For shares held in your own name, votes will be counted as directed, except when no choice for any particular matter is made. In that case, and only for the matter for which no choice is indicated, the shares will be voted as recommended by the Board unless the shares are held in one of the Retirement or Deferred Compensation Plans. If held in one of these Plans, they will be voted in the same proportion as the other shares in the Retirement or Deferred Compensation Plans have been voted.

        For shares held indirectly through a bank, broker or other holder of record, unless you give your broker, bank or other holder of record specific instructions, your shares will not be voted on any of the proposals other than Proposal 2. Under the New York Stock Exchange ("NYSE") rules that govern voting by brokers of shares held in street name, brokers have the discretion to vote those shares only on routine matters, but not on non-routine matters, as defined by those rules. The only routine matter that will be voted on is Proposal 2, the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accountants for fiscal year 2011.

What vote is required for approval?

        With regard to Proposal 1, our Bylaws require that director nominees are elected by an affirmative vote of the majority of votes cast, except for certain exceptions that are not currently applicable. In addition, NYSE rules require that for Proposal 4 (the amendment to the Company's Equity Incentive Plan) to be approved, the total votes cast for approval must exceed 50% of the shares of Common Stock outstanding and entitled to vote. With respect to Proposal 2 (ratification of independent registered public accountants), Proposal 3 (approval of the Company's Management Incentive Plan), and Proposal 5 (advisory vote on the Company's 2010 executive compensation), the affirmative vote of the majority of the votes cast on each of the proposals is required for approval. Because Proposal 6 (the advisory vote on the frequency of future advisory votes on executive compensation) has three alternatives, a plurality of the votes cast will be the standard for determining which frequency has been recommended by the Stockholders.

        Three of the matters that will be presented to a vote of stockholders are advisory in nature and will not be binding on the Company or the Board of Directors: ratification of the appointment of independent registered public accountants; approval of the 2010 executive compensation; and the choice of the frequency of future advisory votes on executive compensation.

What is a broker non-vote and what is the effect of a broker non-vote?

        A "broker non-vote" occurs when a street-name stockholder does not give instructions to the holder of record on how the stockholder wants his or her shares voted, but the holder of record exercises its discretionary authority under the rules of the NYSE to vote on one or more, but not all, of the proposals. In such a case, a "broker non-vote" occurs with respect to the proposals not voted on. Shares represented by "broker non-votes" will, however, be counted in determining whether a quorum is present.

        In the absence of instructions from the stockholder, the holder of record may exercise its discretionary authority and vote the shares it holds as a holder of record only for Proposal 2 (the ratification of the appointment of the independent registered public accountants), and does not have the discretionary authority to vote them on any of the other Proposals.

        Therefore, if you are a street-named stockholder, your shares will not be voted on any Proposal for which you do not give your broker, bank or other holder of record instructions on how to vote on any

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Proposal other than Proposal 2, and your shares will have no effect on the outcome of the vote on any such other Proposal.

What is an abstention and what is the effect of an abstention?

        If you do not desire to vote on any proposal or have your shares voted as provided for in the preceding question, you may abstain from voting by marking the appropriate space on the proxy card or by following the telephone or Internet instructions. Shares voted as abstaining will be counted as present for both the purpose of establishing a quorum and the purpose of determining the number of votes needed for approval of any proposal before the Meeting.

        Abstentions will be counted as votes cast but since they are not counted as "For", they have the effect of a negative vote, except with respect to Proposal 6, in which case they will have no effect on the choice of the frequency of future advisory votes on executive compensation.

What constitutes a quorum?

        The presence at the Meeting of the holders of a majority of the shares of the Common Stock outstanding on the Record Date, in person or by proxy, will constitute a quorum, permitting business to be conducted at the Meeting. As of the Record Date, 244,955,328 shares of Common Stock, representing the same number of votes, were outstanding. Therefore, the presence of the holders of Common Stock representing at least 122,477,665 votes will be required to establish a quorum.

What shares will be considered "present" at the Meeting?

        The shares voted at the Meeting, shares properly voted by Internet or telephone and shares for which properly signed proxy cards have been returned will be counted as "present" for purposes of establishing a quorum. Proxies containing instructions to abstain on one or more matters, those voted on one or more matters and those containing broker non-votes will be included in the calculation of the number of votes considered to be present at the Meeting.

How can a proxy be revoked?

        You can revoke a proxy at any time prior to a vote at the Meeting by:

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notifying the Secretary of the Company in writing;



•

signing and returning a proxy with a later date; or



•

subsequent vote by Internet or telephone.

Shares held in the name of a bank, broker or other institution may be revoked pursuant to the instructions provided by such institution.

Who will count the votes?

        The Company has hired a third party, Computershare Trust Company, N.A., to determine whether or not a quorum is present at the Meeting and to tabulate votes cast.

Where can I find the results of the voting?

        The voting results will be announced at the Meeting and filed on a Form 8-K with the Securities and Exchange Commission within four business days of the Meeting.

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How can I communicate with the Board of Directors?

        Any interested party can communicate with our Board of Directors, any individual director or groups of directors by sending a letter addressed to the Board of Directors as a whole, to the individual director or to a group of directors, c/o Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027.

How can I find the Company's governance documents, such as the Corporate Governance Principles, the Board Committee Charters, the Code of Ethics for Directors, the Code of Ethics for Senior Financial Officers, and the Code of Conduct for Employees?

        All these documents can be found in the "Governance" and "Compliance" sections of our website: www.c-a-m.com . Please note that documents and information on our website are not incorporated herein by reference. These documents are also available at no cost in print by writing to the Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027.

When and where will a list of stockholders be available?

        A list of stockholders of record will be available for examination at the Company's corporate headquarters during normal business hours for a period of ten days prior to the Meeting.

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CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS —————

Governance

        Corporate governance is typically defined as the system that allocates authority, duties and responsibilities among a company's stockholders, board of directors and management. The stockholders elect the directors and vote on extraordinary matters; the board of directors acts as a company's governing body and is responsible for hiring, overseeing, evaluating and compensating executive officers, particularly the Chief Executive Officer ("CEO"); and management is responsible for managing a company's day-to-day operations.

        The business and affairs of our Company are governed in accordance with the provisions of the Delaware General Corporation Law and the Company's Certificate of Incorporation and Bylaws. Our Board of Directors has adopted written policies to further guide and regulate our actions:

        Corporate Governance Principles.     These Principles set out the essence of our rules and guidelines for self-governance and address such matters as the functions and duties of directors and the Board, the desired composition of our Board, its procedures as well as other matters such as stock ownership guidelines.

        Code of Ethics for Directors.     This Code is designed to promote honest and ethical conduct and compliance with applicable laws, rules, regulations and standards. Our Board recognizes that no code of conduct and ethics can replace the thoughtful behavior of an ethical director, but such a code can focus attention on areas of ethical risk, provide guidance to help recognize and deal with ethical issues, and help to foster a culture of honesty and accountability.

        Code of Conduct.     Our Code of Conduct applies to all of our employees and contractors and is designed to promote honest and ethical conduct and to articulate and provide guidance on our commitment to several key matters such as safety and health, protecting the environment, fair dealing, proper stewardship of our products, use of company resources, and accurate communication about our finances and products. It also addresses the many legal and ethical facets of integrity in business dealings with customers, suppliers, investors, the public, governments and the communities where we do business. Our Code of Conduct has been translated into more than ten languages and is distributed to our employees, who certify their commitment to and compliance with the Code on an annual basis.

        Code of Ethics for Senior Financial Officers.     This Code is designed to promote honest and ethical conduct, proper disclosure of financial information, and compliance with applicable laws, rules and regulations by the Company's officers and financial management.

        These Principles and the Codes are available for review on our website at www.c-a-m.com in the "Governance" and "Compliance" sections. As stated above, documents and information on our website are not incorporated herein by reference.

Board Responsibilities

        The primary responsibility of the Board is to exercise governance over the affairs of the Company and to establish delegations of authority to the Company's management. It is also the Board's responsibility to provide oversight, counseling and direction to the Company's management from the perspective of the long-term interests of the Company and its stockholders. The Board's and its committees' responsibilities include: (a) reviewing and, where appropriate, approving the Company's major financial objectives and strategic and operating plans and actions; (b) overseeing the conduct of the Company's business to evaluate whether it is being properly managed; (c) selecting and regularly evaluating the performance of the CEO; (d) planning for succession with respect to the position of CEO and monitoring management's succession planning for other senior executives; (e) approving the compensation of the Company's executive officers; (f) overseeing the processes for maintaining the Company's integrity with regard to its

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financial statements and other public disclosures; and (g) overseeing the Company's compliance with laws and ethics as well as the Company's compliance programs and policies.

        The Board has instructed the CEO, working with the Company's other executive officers, to manage the Company's business in a manner consistent with all applicable laws and regulations, the Company's standards and practices, and in accordance with any specific plans, instructions or directions of the Board. The CEO and management are responsible for seeking the advice and, in appropriate situations, the approval of the Board with respect to extraordinary actions to be undertaken by the Company.

        Our directors monitor the Company's business and affairs through Board and Board Committee meetings, background and informational materials and presentations provided to them on a regular basis, and meetings with officers and employees of the Company.

Board Leadership Structure and Role in Risk Oversight

        Committees.     Our Board of Directors currently has, and appoints the members of, three permanent Committees of the Board: the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee. Each of these Committees operates pursuant to a written charter which can be found in the "Governance" section of our website at www.c-a-m.com. As stated earlier, documents and information on our website are not incorporated herein by reference. These documents are also available in print from the Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas, 77027. Each of these Committees is composed entirely of independent directors. Membership of the Committees is as follows:

        The Audit Committee reviews and approves the Company's financial statements and earnings releases, oversees the internal audit function and reviews the Company's internal accounting controls. The Audit Committee, along with the Nominating and Governance Committee, oversees the Company's compliance policies and programs. The Audit Committee has the sole authority to appoint, review and discharge our independent registered public accountants. The Board has determined that Messrs. Patrick, Foshee, Reinhardsen and Ross, all of the members of the Audit Committee, are "audit committee financial experts" and "independent" as defined under applicable SEC and NYSE rules. The Report of the Audit Committee appears on pages 42-43 of this Proxy Statement.

        The Compensation Committee is responsible for developing our non-employee director compensation program. It is responsible for the compensation plans and decisions for all executive officers. With respect to the CEO, the Committee is provided the performance review of the CEO conducted annually by the Nominating and Governance Committee and confers with all other independent directors in Executive Session before making its compensation decisions regarding the CEO. The Compensation Committee determines the compensation of the other executive officers. It also oversees the compensation program for non-executive officers and employees and supervises and administers the compensation and benefits policies and plans of the Company. The Compensation Committee is assisted in these matters by an independent compensation consultant, hired by and serving at the pleasure of the Committee. The Compensation Committee also oversees executive development and succession planning, though sharing the responsibility for succession planning for the CEO and the Chairman of the Board with the

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Nominating and Governance Committee. A description of the Committee's role in determining executive compensation, including the CEO's compensation, and its use of an independent compensation consultant, is contained in "Executive Compensation — Compensation Discussion and Analysis," which appears on pages 18-42 of this Proxy Statement. A description of the Committee's role in determining non-employee director compensation is contained in "Corporate Governance and Board of Directors Matters — Director Compensation," which appears on pages 6-17 of this Proxy Statement.

        The Nominating and Governance Committee is responsible for developing, reviewing and monitoring compliance with the Company's policies and practices relating to corporate governance, including the Company's Corporate Governance Principles, and for monitoring compliance with corporate governance rules and regulations, including the Company's Policy on Related Person Transactions, and serves as the Company's nominating committee. The Nominating and Governance Committee annually reviews the performance of the CEO, and, along with the Compensation Committee, is responsible for succession planning for the CEO and the Chairman of the Board. The Nominating and Governance Committee is responsible for reviewing and recommending to the Board nominees for directors, recommending committee assignments and conducting an annual review of Board effectiveness. The Nominating and Governance Committee, along with the Audit Committee, is responsible for overseeing the Company's compliance policies and program.

        Chairman of the Board and Chief Executive Officer Positions.     The Board believes it may be desirable and in the best interests of the Company to combine these positions or to separate them depending upon the circumstances. These positions were separated in 2008 to ensure an orderly transition when our Board appointed our then Chief Operating Officer, Mr. Moore, as CEO, and our former Chairman and CEO, Mr. Erikson, continued as Chairman of the Board. Effective May 3, 2011, these positions will once again be combined when Mr. Erikson steps down as Chairman and Mr. Moore becomes our Chairman as well as our CEO. The Board believes recombining these positions will best serve the interests of the Company and its stockholders under the present circumstances.

        Presiding Director.     The Board has elected a presiding director annually since 2003 to preside over the Executive Sessions of the independent directors. The Board is of the opinion that it is appropriate to have a Presiding Director whether the positions of Chairman and CEO are combined or separated. The Board elected Mr. David Ross as presiding director for the Board to serve from May 2010 to May 2011. Mr. Ross is also Chair of the Nominating and Governance Committee.

        Board's Role in Risk Oversight.     Our Board has and exercises ultimate oversight responsibility with respect to the management of the strategic, operational, financial and legal risks facing the Company and its operations and financial condition. The Board is involved in setting the Company's business and financial strategies and establishing what constitutes the appropriate level of risk for the Company and its business segments. Various committees of the Board also have responsibility for risk management.

        The Board delegated to its Audit Committee the responsibility to oversee financial and compliance risks, including internal controls. It has delegated to its Nominating and Governance Committee the responsibility to oversee the effectiveness of the Company's compliance programs.

        The Compensation Committee is responsible for assessing the nature and degree of risk that may be created by our compensation policies and practices to ensure the appropriateness of risk-taking and their consistency with the Company's business strategies. To conduct the assessment, the Committee, with the assistance of its independent compensation consultant, reviews the Company's compensation policies and practices and in particular, our incentive plans, by plan, the eligible participants, the performance measurements, the party responsible for certifying performance achievement, and the sums that could be earned. The Committee determined at its February 2011 meeting that the Company's compensation policies and practices do not encourage or create risk-taking that could be reasonably likely to have a material adverse impact on the Company.

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Compensation Committee Interlocks and Insider Participation

        Our Compensation Committee is comprised entirely of independent directors. None of the members of the Committee during fiscal 2010 or as of the date of this proxy statement is or has been an officer or employee of the Company and no executive officer of the Company has served on the compensation committee or board of any company that employed any member of the Company's Compensation Committee or Board.

Meetings and Meeting Attendance

        The Board and its Committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. Board and Committee agendas include regularly scheduled Executive Sessions for the independent directors to meet without management present. The Board's Presiding Director leads the Executive Sessions of the Board, and the Committee Chairs lead those of the Committees. The Board has delegated various responsibilities and authority to the Board Committees as described in this section of the Proxy Statement. Committees regularly report on their activities and actions to the full Board. Board members have access to all of the Company's employees outside of Board meetings. Board members periodically visit Company sites and events worldwide and meet with local management at those sites and events.

        During 2010, our Board of Directors held 15 meetings; the Audit Committee held 7 meetings; the Compensation Committee held 4 meetings; and the Nominating and Governance Committee held 4 meetings. Attendance for all such meetings was 96%. Each director is expected to make a reasonable effort to attend all meetings of the Board, all meetings of the Committees of which such director is a member, and the Company's annual meeting of stockholders. All of the directors attended the Company's 2010 annual meeting of stockholders, except Mr. Moore, who was testifying before a Congressional Committee. Each director is also expected to have reviewed materials supplied in advance of such meetings.

Director Independence

        Our Board believes that a majority of our directors should be independent, as defined under the standards adopted by the NYSE. The Board makes an annual determination as to the independence of each of the directors. Under the NYSE standards, no director can qualify as independent if, among other things, the director or any immediate family member is a present or former employee of the Company or its independent registered public accountants, or has been part of an interlocking directorate. Additionally, no director can qualify as independent unless the Board affirmatively determines that the director has no material relationship with the Company that might interfere with the exercise of his or her independence from management and the Company. In evaluating each director's independence, the Board considers all relevant facts and circumstances in making a determination of independence. In particular, when assessing the materiality of a director's relationship with the Company, the Board considers the issue not merely from the standpoint of the director, but also from the standpoint of persons or organizations with which the director has an affiliation. In its determination of independence, the Board reviewed and considered all relationships and transactions between each director, his family members or any business, charity or other entity in which the director has an interest, and the Company, its affiliates, or any entity in which the Company's senior management has an interest. As a result of this review, and based on the NYSE standards of independence, the Board affirmatively determined that Messrs. Cunningham, Fluor, Foshee, Patrick, Reinhardsen, Ross and Wilkinson are independent from the Company and its management. In addition, the Board affirmatively determined that each of the members of the Audit Committee, Messrs. Foshee, Patrick, Reinhardsen and Ross, are independent under the additional standards for audit committee membership under SEC rules. Messrs. Erikson and Moore are not independent directors as Mr. Erikson was an employee of the Company until April 1, 2008, and Mr. Moore is currently an employee.

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        In connection with its determination as to the independence of directors, the Board considered ordinary course transactions between the Company and other companies for which our directors serve as executive officers. In particular, the Board considered that Mr. Foshee is Chairman and Chief Executive Officer of El Paso Corporation and that, during 2010, El Paso made payments for products purchased from the Company of approximately $12.5 million. These payments represent approximately .20% of the Company's consolidated gross revenues for 2010, and approximately .27% of El Paso's. The Board also considered that El Paso may order additional product from the Company in the future. The Board has concluded that these transactions and relationships do not adversely affect Mr. Foshee's ability or willingness to act in the best interests of the Company and its shareholders or otherwise compromise his independence, nor are similar transactions in the future expected to adversely affect Mr. Foshee's independence. The Board took note of the fact that these transactions were on standard terms and conditions and that neither company was afforded any special benefits. For these reasons, and the fact that Mr. Foshee had no involvement in negotiating the terms of the purchases or interest in the transactions, these purchases were not submitted to our Nominating and Governance Committee for review under our Policy on Related Person Transactions described below.

Director Qualifications

        The Nominating and Governance Committee determines the required selection criteria and qualifications for director nominees based upon the needs of the Company at the time nominees are considered. A candidate, at a minimum, must possess the ability to apply good business judgment and must be in a position to properly exercise his or her duties of loyalty and care. Candidates should be persons of high integrity who have exhibited proven leadership capabilities, experience with high levels of responsibilities within their chosen fields, and have the ability to quickly grasp complex principles of business, finance, and the complexities of a global industry subject to a myriad of laws and regulations. Candidates should have large public company experience and experience in the energy or oilfield service industry, preferably including operational experience, and hold or have held an established executive level position in business, finance or education. In general, qualified candidates who are currently serving as executive officers of unrelated entities would be preferred. The Nominating and Governance Committee will consider these same criteria for nominees whether identified by the Committee, by stockholders or by some other source. When current Board members are considered for nomination for re-election, the Nominating and Governance Committee also takes into consideration their prior Board contributions, performance and meeting attendance records.

        Diversity.     Cameron is a global enterprise that generates approximately half of its revenues from locations outside the U.S. We do business in 300 locations, in more than 50 countries, with a workforce more than half of which is outside the U.S., spread over six continents. We translate our Compliance materials in ten different languages. We believe diversity includes gender and race, but we also believe it goes beyond that to include geographical and cultural diversity. As a company that has expanded significantly outside the U.S., it is important to, and in the best interest of, the Company to think in global terms and define diversity accordingly. While we believe that the primary criteria should be whether candidates have the qualifications, experience, skills and talents required to oversee the operations of a corporation as large and as complex as Cameron, we also believe that diversity is an important ingredient in a successful board mix. The Charter of our Nominating and Governance Committee provides that when evaluating director candidates, consideration will be given to those otherwise qualified individuals who offer diversity of geographical and/or cultural background, race/ethnicity, and/or gender; and that any search firm retained to assist the Committee in identifying director candidates be instructed to seek out and include diverse candidates for consideration.

        In 2009, the Board elected Jon Erik Reinhardsen, president and CEO of Petroleum Geo-Services ASA, as a director. Mr. Reinhardsen, a Norwegian who resides in Norway, has extensive experience in the

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global oilfield service industry, particularly in his home country, which is an important oil and gas producing region.

        Qualifications of Current Directors.     Each of our current directors meets the qualifications that have been established. The following are the names of the nominees for director and the continuing directors, in order of their classification, including a description of each director's experience, qualifications and skills.

Nominees Standing For Election

Class I — Term Ending 2014

        Peter J. Fluor offers the perspective of an experienced leader and executive in the energy industry. He is the Chairman of the Board and CEO of Texas Crude Energy, Inc., a private, independent oil and gas exploration company, where he has been employed since 1972 in positions of increasing responsibilities, including President and Chief Financial Officer. He is a director of Fluor Corporation, a provider of engineering, procurement, construction, maintenance and project management, for which he served as Interim Chairman from January 1998 through July 1998, and is currently its Lead Independent Director. He is also a director of Anadarko Petroleum Corporation and a former director of Devon Energy Company, both exploration and production companies. He is a member of the All-American Wildcatters Association, and an Emeritus member of the Council of Overseers of the Jesse H. Jones Graduate School of Management at Rice University. He also serves in positions of leadership in charitable and non-profit organizations, including The Welch Foundation. He has a B.S. degree in Business and an M.B.A. from the University of Southern California. Mr. Fluor has been a director of Cameron since 2005.

        Jack B. Moore, our current President and CEO, has a wealth of experience with Cameron and in the oilfield service sector. He has had positions of increasing responsibility throughout his career evidencing his leadership capabilities and his understanding of the business and financial complexities of a global manufacturing company. Prior to becoming our President and CEO, he was Cameron's Chief Operating Officer, the President of Cameron's Drilling and Production Systems group and General Manager of Cameron's Western Hemisphere. Prior to joining Cameron, he held various management positions, including Vice President, Eastern and Western Hemisphere Operations, of Baker Hughes Incorporated, where he was employed for 23 years. He served on the board of Maverick Tube Corporation, a manufacturer of metal tubular goods for oil drilling, from 2005 until it was sold to Tenaris, S.A. in 2006. He serves on the Board of the Petroleum Equipment Suppliers Association, where he served as Chairman of the Board, the National Ocean Industries Association, and the American Petroleum Institute. He also serves in positions of leadership in charitable and non-profit organizations, including Spindletop Charities, the Greater Houston Partnership and The University of Houston C.T. Bauer College of Business Dean's Executive Board. Mr. Moore has a B.B.A. from the University of Houston and is a graduate of the Advanced Management Program at Harvard Graduate School of Business Administration. He has been a director of Cameron since 2007.

        David Ross offers executive experience in the oil and gas industry, finance and academia. He was Chairman and CEO of the Sterling Consulting Group, a firm which provides analytical research, planning and evaluation services to companies in the oil and gas industry; before that, he was a principal in the Sterling Group, a firm engaged in leveraged buyouts, primarily in the chemical industry, and in Camp, Ross, Santoski & Hanzlik, Inc., which provided planning and consulting services to the oil and gas industry; and was Treasurer of Enstar Corporation, an oil and gas company. He is an Emeritus member of the Council of Overseers of the Jesse H. Jones Graduate School of Management at Rice University and was an Adjunct Professor of Finance at Rice University for 25 years. He is a director of Compete-At.com, a company which provides online event registration and membership software, and Process Technology Holdings, a company that manufactures linear valve actuators, and has been a director of Nuevo Energy Company, an exploration and production company. He also serves in positions of leadership in charitable and non-profit organizations, including the Nantucket Conservation Foundation and the Nantucket

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Historical Association. Mr. Ross has a B.A. degree in Mathematics from Yale and an M.B.A. from the Harvard Graduate School of Business Administration and has been a director of Cameron since 1995.

Continuing Directors

Class II — Term Ending 2012

        C. Baker Cunningham, age 69, has demonstrated his leadership capabilities, senior-level experience and the ability to deal with the complexities of business and finance in a global context and brings to our Board an in-depth knowledge of operations, finance and corporate governance. In addition, he has an engineering and manufacturing background, two of the core competencies required of the Company. He has served in the roles of Chairman of the Board, CEO and President, first with Belden Inc., a wire, cable and fiber optic products manufacturing company, and then following a merger, as the President, CEO and director, of Belden CDT Inc., a manufacturer of high-speed electronic cables, focusing on products for the specialty electronic and data networking markets, including connectivity, both with manufacturing operations in countries around the world. Mr. Cunningham also held a number of executive positions, including Executive Vice President, Operations, with Cooper Industries Inc., a diversified manufacturer, marketer and seller of electronic products, tools and hardware. Mr. Cunningham is a director of Rea Magnet Wire Company, Inc., a privately held corporation in Fort Wayne, Indiana, and serves in positions of leadership in charitable and non-profit organizations, including President and a director of the Central Institute for the Deaf, St. Louis, Missouri. He has a B.S. degree in Civil Engineering from Washington University, an M.S. degree in Civil Engineering from Georgia Institute of Technology, and an M.B.A. from the Harvard Graduate School of Business Administration. Mr. Cunningham has been a director of Cameron since 1996.

        Sheldon R. Erikson, age 69, is our current Chairman and has been our Chairman since 1996, and was CEO and President of Cameron from the time of its creation in 1995 through the transition to our current President and CEO on April 1, 2008. Under Mr. Erikson's leadership, guidance and direction, Cameron has grown from a company with annual revenues of $1.14 billion to one with $6.135 billion. His knowledge of the Company and the industry and his continued involvement with the Company following our transition to our new CEO is of great value to the Board and the Company. Prior to assuming his leadership role with Cameron, Mr. Erikson had a long and distinguished career in the energy and manufacturing sectors. He was Chairman of the Board, President and CEO of The Western Company of North America, an international petroleum service company engaged in pressure pumping, well stimulating and cementing and offshore drilling. Previously, he was President of the Joy Petroleum Equipment Group of Joy Manufacturing Company. He is a director of Endeavour International Corporation, an oil and gas exploration and production company, and Rockwood Holdings, Inc., a company in the specialty chemicals and advanced materials businesses, and has been a director of Triton Energy Company and Spinnaker Exploration Company, both oil and gas exploration companies, Layne Christensen Co., a provider of services and related products for the water, mineral and energy markets, and NCI Building Systems, a provider of products and services for the construction industry. He also serves on the boards of directors of the National Petroleum Council, American Petroleum Institute, National Ocean Industries Association and the Petroleum Equipment Suppliers Association, of which he is a past chairman. He also serves in positions of leadership in charitable and non-profit organizations, including The University of Texas MD Anderson Cancer Center and the Texas Heart Institute. Mr. Erikson has an M.B.A. from the Harvard Graduate School of Business Administration and studied engineering and economics at the University of Illinois.

        Douglas L. Foshee, age 51, provides significant experience in the oil and gas industry and a depth of financial and corporate governance knowledge. He has held leadership and executive positions in the oilfield service sector, in which Cameron competes, and in finance. He is the Chairman and CEO of El Paso Corporation and a director of El Paso Pipeline GP Company, L.L.C., the general partner of El Paso's publicly-traded master limited partnership, El Paso Pipeline Partners, L.P. He served as Executive

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Vice President and Chief Operating Officer and Executive Vice President and Chief Financial Officer of Halliburton Company. Prior to Halliburton, he was President, CEO and Chairman of Nuevo Energy Company, an exploration and production company, and CEO and Chief Operating Officer of Torch Energy Advisors Inc., a privately-held energy company. He held various positions in finance and new business ventures with ARCO International Oil and Gas Company and spent several years in energy banking. He served as a Trustee of AIG Credit Facility Trust, overseeing the U.S. government's equity interest in American International Group for the benefit of the U.S. Treasury, and is Chairman of the Federal Reserve Bank of Dallas, Houston Branch. He is on the Council of Overseers of the Jesse H. Jones Graduate School of Management at Rice University, Rice University's board of trustees and KIPP Houston's board of trustees. He has an MBA from the Jesse H. Jones School at Rice University, a B.B.A. degree from Southwest Texas State University and is a graduate of the Southwestern Graduate School of Banking at Southern Methodist University. He also serves in positions of leadership in charitable and non-profit organizations, including the Texas Business Hall of Fame Foundation, Central Houston, Inc. and the Greater Houston Partnership. Mr. Foshee has been a director of Cameron since 2008.

Class III — Term Ending 2013

        Michael E. Patrick, age 67, brings to the Board and Cameron a depth of knowledge of the financial markets and matters of finance in general, as well as experience as a director of oil and gas service companies for 20 years. He has served as the Vice President and Chief Investment Officer of Meadows Foundation, Inc., a philanthropic association, is a director of Apptricity Corporation, which provides enterprise applications and services used to automate financial management, advanced logistics, supply chain, and workforce management, and was a director of BJ Services Company, an oilfield services company acquired by Baker Hughes International in 2010. He was a director of The Western Company of North America, an oilfield service company acquired by and merged into BJ Services Company. He has a B.B.A. degree from Harvard University and an M.B.A. from the Harvard Graduate School of Business Administration and has been a director of Cameron since 1996.

        Jon Erik Reinhardsen, age 54, was elected to the Board in June 2009, and is the Board's first non-U.S. director. In addition to his unique geographical and cultural perspective, he provides knowledge of the oil and gas industry, the oilfield service sector, and experience with other global industries from an executive level. He is President and CEO of Petroleum Geo-Services ASA, a focused geophysical company providing a broad range of seismic and reservoir services, in Lysaker, Norway. He has been a Vice President of Alcoa Inc. and President of its Primary Products Global Growth, Energy and Bauxite businesses, and a Group Executive Vice President as well as holding various other senior-level positions with Aker Kvaerner ASA, a provider of engineering and construction services, technology products and integrated solutions. He serves on the boards of Höegh LNG Holdings Ltd., Höegh Autoliners Holding AS and AWilhelmsen Management AS. He has an M.S. degree in Applied Mathematics/Geophysics from the University of Bergen, Norway and attended the International Executive Program at the Institute for Management Development in Lausanne, Switzerland.

        Bruce W. Wilkinson, age 66, provides extensive experience to the Board as a result of having served as Chairman, CEO and President of McDermott International, Inc., a leading global engineering and construction company serving the energy and power industries. In addition to his knowledge of the oilfield service sector and governance matters affecting public corporations, Mr. Wilkinson's familiarity with the large-scale, complex projects undertaken by McDermott is valuable to Cameron's evaluation and execution of its subsea systems projects, which carry similar challenges of scope and complexity. He currently is a principal of ANCORA Partners, LLC, a private equity group. He has served as Chairman and CEO of Chemical Logistics Corporation, a company formed to consolidate chemical distribution companies; President and CEO of Tyler Corporation, a diversified manufacturing and service company; Interim President and CEO of Proler International, Inc., a ferrous metals recycling company; and Chairman and CEO of CRSS, Inc. a global engineering and construction services company. He has also been a Principal

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of Pinnacle Equity Partners, L.L.C., a private equity group. He also serves in positions of leadership in charitable and non-profit organizations, including the University of St. Thomas in Houston, Texas, and the Duchesne Academy of the Sacred Heart in Houston, where he serves as a Trustee of each. Mr. Wilkinson has B.A. and J.D. degrees from the University of Oklahoma and an LLM from the University of London and has been a director of Cameron since 2002. Mr. Wilkinson has been a director of Cameron since 2002.

        The following table notes the breadth and variety of business experience that each of our directors brings to the Company.

Director Selection Process

        The Nominating and Governance Committee is responsible for developing the Company's slate of candidates for director nominees for election by stockholders, which the Committee then recommends to the Board for its consideration. The Committee customarily engages the services of a third-party search firm to assist in the identification or evaluation of Board member candidates when searching for director nominees.

        The Nominating and Governance Committee determines the required selection criteria and qualifications for director nominees based upon the needs of the Company at the time nominees are considered. The Committee determines these needs in relation to the composition of the Board evaluated as a whole. The Committee's primary objective is to assemble a group that can effectively work together using its diversity of experience and perspectives to see that the Company is well managed and represents the interests of the Company and its stockholders.

        The qualifications the Committee uses to judge and select director candidates, including diversity, are discussed in "Director Qualifications," above. The Nominating and Governance Committee will consider the same criteria for nominees whether identified by the Committee, by stockholders or by some other source. When current Board members are considered for nomination for re-election, the Nominating and Governance Committee also takes into consideration their prior Board contributions, performance and meeting attendance records.

        Stockholders wishing to identify a candidate for director may do so by sending the following information to the Nominating and Governance Committee, c/o Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027: (1) the name of the candidate and a brief biographical sketch and resume; (2) contact information for the candidate and a document evidencing the candidate's willingness to serve as a director, if elected; and (3) a signed statement as to the submitting stockholder's current status as a stockholder and the number of shares currently held.

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        The Nominating and Governance Committee assesses each candidate based upon the candidate's resumé and biographical information, the willingness to serve, and other background information. This information is evaluated against the criteria set forth above and the specific needs of the Company at the time. Based upon this preliminary assessment, candidates may be invited to participate in a series of interviews. Following this process, the Nominating and Governance Committee determines which candidates to recommend to the Board for nomination for election by our stockholders at the next annual meeting. The Nominating and Governance Committee uses the same process for evaluating all candidates, regardless of how the candidates are brought to the attention of the Committee.

        No candidates for director were submitted to the Nominating and Governance Committee by any stockholder in connection with the 2011 Annual Meeting. Any stockholder desiring to present a director candidate for consideration by the Committee for our 2012 Annual Meeting must do so prior to September 1, 2011, in order to provide adequate time to duly consider the candidate and comply with our Bylaws.

Stockholder Communications with the Board

        Any interested party desiring to communicate with our Board of Directors or any individual director may send a letter addressed to our Board of Directors as a whole or to individual directors, c/o Corporate Secretary, 1333 West Loop South, Suite 1700, Houston, Texas 77027. The Corporate Secretary has been instructed by the Board to screen the communications and promptly forward those to the full Board or to the individual director specifically addressed therein.

Policy on Related Person Transactions

        Our Board has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which the Company is a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% stockholders (or their immediate family members), each a "related person," has a direct or indirect material interest.

        If a related person proposes to enter into such a transaction, arrangement or relationship (a "related person transaction"), the related person must report the proposed related person transaction and the Board's Nominating and Governance Committee will review, and if appropriate, approve the proposed related person transaction. Any related person transaction that is ongoing in nature will be reviewed annually.

        A related person transaction reviewed under the Policy will be considered approved or ratified if it is authorized by the Committee after full disclosure of the related person's interest in the transaction. As appropriate for the circumstances, the Committee will review and consider: the approximate dollar value of the amount involved; the related person's involvement in the negotiation of the terms and conditions, including the price of the transaction; the related person's interest in the related person transaction; whether the transaction was undertaken in the ordinary course of our business; whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party; the purpose of, and the potential benefits to us of, the transaction; and any other information regarding the transaction or the related person in the context of the proposed transaction that the Committee determines to be relevant to its decision to either approve or disapprove the transaction.

        The Committee may approve or ratify the transaction only if the Committee determines that, under all of the circumstances, the transaction is not inconsistent with the Company's best interests. The Committee may impose any conditions on the related person transaction that it deems appropriate.

        In addition to the transactions that are excluded by the instructions to the SEC's related person transaction disclosure rule, the Board has determined that the following transactions do not create a

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material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:

•

interests arising solely from the related person's position as an executive officer of another entity that is a participant in the transaction, where (a) the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, (b) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction, (c) the amount involved in the transaction equals less than the greater of $1 million or 2% of the annual consolidated gross revenues of the other entity that is a party to the transaction, and (d) the amount involved in the transaction equals less than 2% of the Company's annual consolidated gross revenues; and



•

a transaction that is specifically contemplated by provisions of the Company's Certificate of Incorporation or Bylaws, such as a contract of indemnity.

Director Compensation

        The compensation program for our non-employee directors has been developed by the Compensation Committee after consideration of the recommendations and competitive market data provided by Frederic W. Cook & Co., Inc., ("FWC") an independent compensation consultant, whom the Compensation Committee has retained as its independent consultant. The program has been approved by the full Board.

        The following sets out the components of the compensation program for our non-employee directors. Employee directors receive no additional compensation for serving on our Board of Directors:

        Equity grants, both the Initial and Annual, are made in the form of Deferred Stock Units ("DSUs"). One quarter of each year's Annual Equity Grant is earned and vests at the end of each quarter of service as a director during that year. Vested DSUs are payable in Common Stock at the earlier of three years from the grant date or the end of Board tenure, unless electively deferred by the director for a longer period. Directors may elect to receive their Board and Committee Chair retainers in cash or defer them under our Deferred Compensation Plan for Non-Employee Directors. Deferral can be made for such periods of time as selected by the director and can be made into Common Stock or cash, at the director's election. No above-market interest, as defined for purposes of the SEC's proxy reporting rules, is credited or paid on cash deferrals.

        Directors are eligible to use Company-leased aircraft for personal travel, provided they reimburse the Company for the incremental operating cost to the Company of any such use. Spouses of directors are

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invited to the Company's annual off-site Board meeting. Directors are reimbursed by the Company for the cost of their spouses' travel to and from the meeting.

Director Compensation Table

        The following table provides compensation information for 2010 for each non-employee director:

Stock Ownership Guidelines

        The Company has had stock ownership guidelines for its directors, and stock ownership requirements for its officers and other key executives, since 1996. The Board adopted these guidelines and requirements in order to align the economic interests of the directors, officers and other key executives of the Company with those of all stockholders and to further focus their attention on enhancing stockholder value. Under these guidelines, outside directors are expected to own shares of Common Stock within one year and own shares of Common Stock with a value of at least $300,000 within three years of their election to the Board. Officers and other key executives are required to own Common Stock having a market value between two and six times their base salary, as is more fully described in "Executive Compensation — Compensation Discussion and Analysis — Stock Ownership Requirements" on page 30 of this Proxy Statement. Valuation for these purposes is calculated using current fair market value or cost, whichever is greater. DSUs owned by directors and Restricted Stock Units ("RSUs") owned by officers and other key executives are included in the stock ownership calculation. All directors are in compliance with the guidelines.

Hedging Policy

        The Company has a written "Policy on Trades, Derivatives or Hedging Transactions, and Pledges by Directors, Officers and Key Employees" that, among other things, prohibits derivative or hedging transactions involving our Common Stock, or the use of our Common Stock as security, as collateral in a margin account, or as a pledge or other hypothecation.

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EXECUTIVE COMPENSATION —————

Compensation Committee Report

        We have reviewed and discussed with management the Compensation Discussion and Analysis included in the Company's 2011 Proxy Statement, filed pursuant to Section 14(a) of the Securities Exchange Act of 1934. Based on these reviews and discussions, we recommend to the Board of Directors that this Compensation Discussion and Analysis be included in this, the Company's Proxy Statement.

Compensation Discussion and Analysis

        This section explains our executive compensation philosophy and practices and, in particular, those with respect to our Named Executive Officers or "NEOs." Our NEOs are our Chief Executive Officer and Chief Financial Officer, as well as our three most highly compensated executive officers in 2010.

Summary

        We believe that the most effective executive compensation program is one designed to reward the achievement of specific annual, long-term and strategic goals. The design of our program reflects this belief and is intentionally performance-based to align the interests of our executive officers with those of our stockholders by rewarding performance that meets or exceeds established goals, with the ultimate objective of increasing stockholder value. Shareholder alignment is achieved by making approximately 75% of our executive compensation variable, so that competitive median or higher total direct compensation could only be actually earned by performance meeting or exceeding goals.

        The total direct compensation of our executives is a mix of base salary, annual incentive bonus, and long-term incentives. The benefits provided to our executive officers are the same as those broadly available to our U.S. salaried employees, except for a nonqualified deferred contribution plan that restores benefits lost by tax-code limitations under the same funding formula as for other covered employees. Perquisites include only financial planning services and the opportunity for senior vice presidents and higher ranked officers to use Company-leased aircraft for personal travel, provided they reimburse the Company for incremental operating costs.

        We had Earnings Per Share ("EPS") growth of 2%, while delivering above expectations on our Business Transformation strategy. At the same time, we generated double-digit shareholder returns for 2010 and on-average returns for the last three years in a difficult world economy. As a result, our NEOs 2010 earned annual bonuses funded at an average of 133.6% of target, while our performance-based long-term incentives (performance-based restricted stock units or "PRSUs") were earned at 133.4% of target, and outstanding stock options continued to accumulate value for reward and retention. We have avoided entitlements and problematic executive pay practices by not having employment contracts, defined benefit supplemental pensions, or material compensation value in the form of perquisites. Meanwhile, we provide only market-competitive severance with "best-practice" design provisions such as double-trigger equity acceleration in the event of a change in control, and no tax gross-ups for newly hired or promoted executives since 2009. We also have policies to mitigate compensation-related risk such as ownership guidelines, claw-backs, prohibitions on insider trading and hedging, and oversight by an independent Compensation Committee.

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        In 2010, our Compensation Committee made a number of decisions impacting 2011 executive compensation:

•

The performance goal for performance-based RSU awards ("PRSUs"), which make up 30% of our long-term incentive compensation for 2011, was changed to a three-year Return on Invested Capital ("ROIC") goal. An ROIC goal has been established for 2011 and will be for each of 2012 and 2013. Performance against each year's ROIC goal will be averaged to determine earned awards.



•

The 2011 EPS and Earnings Before Interest and Taxes ("EBIT") goals for determining annual bonuses have been set above those in our approved operating budget, making performance against these goals more difficult.



•

The 2011 performance range between target and maximum for our annual incentive bonus was raised from 20% to 25% above the target performance goals, making it more difficult to achieve higher than target performance.



•

Club dues reimbursements to our executive officers, including NEOs, was terminated.

        The following is a list of our NEOs by name, position, and years in position:

        The remainder of the Compensation Discussion and Analysis is organized into five parts, as follows:

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Part I — Company Performance.

        We experienced significant growth in 2010 over 2009 in revenue and net income, as well as shareholder return. The same is true over the past five years, as illustrated below:

        We have also performed well in comparison to our peers. For example, for the three-year period ended December 2010, the Company's growth in Revenues, growth in EBIT, growth in EPS and Total Shareholder Return were all in the top quartile when compared to our Peer Group (described on page 22).

Part II — Executive Compensation Philosophy and Objectives.

        Our executive compensation program is designed to ensure that compensation goals are aligned with operating and performance metrics intended to drive longer-term stockholder value creation. The intent and purpose of the program is to allow us:

•

to attract, retain and motivate qualified executives to lead and manage the business and affairs of the Company,



•

to provide performance-based cash and stock incentives to encourage and reward achievement of the Company's annual goals and long-term and strategic objectives, and



•

to provide a competitive total compensation package that recognizes and rewards not only the Company's performance against its goals and objectives but also the individual's performance and contributions to the Company.

        We believe that a significant portion of total direct compensation should be contingent upon performance, so that targeted total direct compensation can be achieved only if performance targets established by the Compensation Committee are met. For 2010, the annual bonus and PRSUs rewarded performance against annual performance goals because multi-year forecasting was difficult in the uncertain macro-economic environment facing the industry, and the value of stock options is contingent upon longer-term share price appreciation. Beginning in 2011, the measurement period for the PRSUs was increased from one to three years. We consider these elements of executive compensation to be "at risk," or performance-based compensation, because neither our annual bonus nor our performance-based awards can be earned unless pre-determined levels of performance are achieved against approved goals, and our stock options provide value only to the extent that there is an increase in the value of our Common Stock during their option term. Our annual bonus and PRSUs are designed to have significant swings in value, both above and below targeted levels, depending on the level of achievement against goals, in order to both encourage and reward performance.

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        The following charts show the mix of the fixed and variable components of total direct compensation paid to our CEO for 2010 and the average of that paid to our other NEOs:

        Our program targets the level of cash compensation (made up of base salaries and annual incentives) at the median and our long-term incentives at the 75 ^th  percentile of what the Committee and its independent compensation consultant consider to be "competitive market levels." These competitive market levels are considered by the Committee as appropriate for achieving our compensation objectives, and data is derived from a competitive review conducted each year by the Committee's independent compensation consultant. This review compares the compensation of a number of our officers against that of similar positions with our peers and those in the manufacturing industry in general. Peer group data is from SEC filings, including proxy statements and Form 8-K filings, and industry data is from Towers Watson and Aon Hewitt pay surveys. A competitive market level of compensation for each executive position is determined by using a combination of both peer company data and industry survey data. In the case of our CEO, Chief Operating Officer and Chief Financial Officer, peer company data was given a 75% weighting and survey data a 25% weighting; for our fourth highest NEO, peer company data and survey data were weighted 50% each; and for the fifth, the weighting was 25% and 75%. The reason for the different weightings is to reflect the relative quality of the position matches at each level as reflected in the disclosure data versus the pay surveys.

        The annual competitive compensation review conducted by the Committee's independent consultant shows that our methodology for determining market levels of compensation by position resulted in our total direct compensation being targeted below the median of our peer companies, in part due to the impact of the weighting of manufacturing industry data discussed above and, in part due to the relatively short tenure of a number of our executive officers, including some of our NEOs. The following table shows the quartile in which the 2010 target total direct compensation of each of our NEOs fell when compared to that of comparable positions in our peer group companies and in the manufacturing industry, and the

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percentage above or below the Committee's and its consultant's determination of the competitive median market level for each of our NEOs.

         4 ^th  = top quartile    1 ^st  = bottom quartile

        Peer Group.     The peer group used by the Committee is objectively selected to make competitive comparisons and is composed of publicly traded oil services and equipment manufacturing companies of generally similar size and complexity, with whom we compete to attract and retain qualified executives. The peer group companies used in 2010 are the same as those used in 2009, except for BJ Services Company and Smith International, Inc., both of which were acquired by other peer group companies during 2010. Seven of the nine companies in our peer group are included, along with us, in the Philadelphia Oil Service Sector Index (OSX), a group of 15 companies. The two companies in addition to the seven OSX companies in our peer group are FMC Technologies Inc. and McDermott International, Inc. The OSX companies not included in our peer group are Diamond Offshore Drilling, Inc., Global Industries, Ltd., Lufkin Industries, Inc., Noble Corporation, Oceaneering International, Inc., Rowan Companies, Inc. and Tidewater, Inc. Three were not included because they are in sufficiently different businesses from us that the Committee does not consider them peers, and the other four were not included so that drilling companies would not be overweighted in the overall group.

        In 2010, our peer group was composed of the following companies, as selected and approved by the Compensation Committee, taking into account the recommendations made by the Committee's independent compensation consultant:

Part III — Roles and Responsibilities.

        Role of the Compensation Committee.     The Compensation Committee makes all compensation decisions regarding executive officers of the Company, including our NEOs, except in the case of our CEO. The Committee confers with all the other independent directors in Executive Session of the Board before making its decisions regarding the compensation of our CEO.

        The principal functions of the Committee with respect to executive compensation include:

•

Establishing our compensation policies and reviewing them to determine (i) whether they adequately support our business goals and objectives and (ii) whether they encourage inappropriate behavior from the perspective of risks that could have a material adverse effect on the Company;

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•

Approving the peer group selection criteria that determine the companies included in our peer group;



•

Setting the CEO's compensation, giving consideration to the performance evaluation of the CEO conducted by the Nominating and Governance Committee, competitive data and the recommendation of the Committee's independent compensation consultant;



•

Setting the other executive officers' compensation, giving consideration to performance evaluations provided by the CEO, competitive data and the recommendation of the Committee's independent compensation consultant;



•

Overseeing administration of our annual incentive plan and (i) establishing eligible classes of participants, (ii) setting performance goals, (iii) approving minimum, target and maximum awards and (iv) certifying attainment of goals and approving any payouts;



•

Overseeing administration of our long-term incentive plan, including (i) determining the total number of shares available for grant, (ii) establishing the award guidelines to be used when determining the amount and mix of individual awards, (iii) making grants to officers and key employees and (iv) authorizing the number of shares available for grant to other employees;



•

Exercising oversight responsibility for our severance policies and individual employment and severance arrangements;



•

Reviewing and enforcing compliance with our stock ownership guidelines; and



•

Reviewing and approving our executive benefits and perquisites.

        Role of Compensation Consultant.     The Compensation Committee is assisted in its efforts by FWC, the independent compensation consultant retained by the Committee on an annual basis. With respect to executive compensation matters, FWC reports to and acts at the direction of the Compensation Committee. FWC provides no services for management or the Compensation Committee that are unrelated to duties and responsibilities of the Committee.

        FWC conducts an annual competitive review of our executive compensation program for the Compensation Committee. The review focuses on the program's effectiveness in supporting our business strategy, and its reasonableness as compared to the compensation practices of our peer group and other manufacturing companies. It covers each element of total compensation of executive officers, as compared to peer group data gathered from proxy statements and SEC filings, and from compensation surveys of the manufacturing industry conducted by Towers Watson and Aon Hewitt Associates. It also includes the cost and potential dilution to our stockholders of equity incentives and a comparison to that of our peer group, and the carried interest equity ownership of each of the executive officers, including both shares owned directly and owned indirectly through outstanding equity grants.

        Role of CEO in the Compensation Decision Process.     Our CEO periodically reviews the performance of other executive officers, including the other NEOs, with the Committee for the Committee's use when making decisions regarding compensation and other matters, principally succession planning. He submits proposals for the performance objectives for annual bonuses and determining the size of long-term incentive grant values. He offers recommendations to the Committee on executive compensation program design and on individual executive officers' compensation components. Our CEO also regularly attends Compensation Committee meetings and provides his perspectives, judgment and recommendations on matters being considered by the Committee.

Part IV — Executive Compensation Decision-Making Process.

        Tally Sheets.     Each year the Compensation Committee is provided annual "tally sheets" that itemize the total compensation of each of our executives, including the NEOs, for the past two years, as well as the

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estimated minimum, target and maximum total compensation that could be earned by each executive during the current year depending on whether, and to what extent, performance-based compensation is earned. The Committee considers the appropriateness and the amounts of each element, the mix of the elements and the overall amount of total compensation when making its decisions on both the compensation program as a whole and the compensation to be paid each executive for the coming year.

        Other Considerations.     When making compensation decisions with respect to executive officers, including our NEOs, in addition to the "tally sheets," the Committee also considers:

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level of responsibilities and impact on Company results of each executive;



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skill and experience needed to fulfill his or her responsibilities;



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effectiveness in discharging his or her responsibilities;



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level of his or her achievement of goals and objectives;



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performance of the Company in relation to its peer group;



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compensation levels and practices of companies with whom we compete for talent;



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total compensation of each executive position as compared with the 25 ^th , 50 ^th  and 75 ^th  percentile compensation for a like position within our peer group and, in order to gain a broader perspective of the range of competitive reasonableness, within the larger category of the manufacturing industry in general;



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analyses prepared by and recommendations of the Committee's independent consultant regarding the appropriate amount and mix of compensation for each executive;



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recommendations of our CEO (except for his own position); and



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internal equity based on the impact of relative duties, responsibilities, position and performance within the Company.

        Base Salary.     Each of our executives receives a base salary for services rendered during the year. Base salaries are paid to provide executive officers with a market-competitive guaranteed level of annual earnings. Base salary ranges are determined for each executive position based on job responsibilities, required experience, internal position relationships and general market competitiveness. Base salaries, along with all other elements of compensation, are reviewed annually by the Committee, giving consideration to:

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total compensation as itemized in the "tally sheets;"



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any changes in levels of responsibility;



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the performance of the executive;



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the annual competitive review of executive compensation prepared by the Committee's independent compensation consultant; and



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an internal review of the executive's compensation relative to base salaries of other executive officers.

        The 2010 base salaries of the NEOs were set by the Committee at its November 2009 meeting. As a result of the Committee's consideration of the factors discussed above, the Committee set the 2010 base salary of Mr. Moore at $970,000, Mr. Sledge at $485,000, Mr. Carne at $600,000, Mr. Lemmer at $450,000, and Mr. Wright at $386,000.

        At its October 2010 meeting, the Committee raised the 2011 base salaries, effective April 1, 2011, of Mr. Moore to $1,065,500, Mr. Sledge to $541,500, Mr. Carne to $656,500, Mr. Lemmer to $494,800, and

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Mr. Wright to $421,500, based on the considerations discussed above, including the promotions during 2010 of Mr. Carne to Executive Vice President and Chief Operating Officer, and Mr. Wright to Senior Vice President.

        Annual Incentives.     Our stockholder-approved Management Incentive Compensation Plan ("MICP") provides each of our executive officers and other key management employees an opportunity to earn an annual cash bonus based on actual performance against pre-established objectives set by the Compensation Committee and based on the Company's Board-approved operating plan and budget. Annual bonuses are paid to reflect competitive practice and reward annual Company, business and individual performance.

        NEO Target-Award Opportunities.     The Compensation Committee, taking into consideration peer group and industry competitive practices, the advice and recommendations of the Committee's independent compensation consultant, and the recommendations of the CEO for positions other than his own, establishes a target-award opportunity for each executive expressed as a percentage of base salary. Our target values are set at or near the market-median target for similar positions within our peer group. The target award opportunities expressed as a percentage of base salary for our NEOs for 2010 and 2011 are set out below.

        Setting the Performance Objectives.     Performance objectives are set by the Committee for each year based on proposals submitted to the Committee by the CEO. The CEO's proposals, and ultimately the performance objectives selected, are based on and designed to encourage achievement of the Company's performance goals set out in the Company's Board-approved annual operating plan and budget as well as business strategies for that year. The Committee also considers overall market conditions, the industry environment and the Company's positions in its respective business lines when setting performance objectives.

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         2010 Performance Objectives.    MICP performance objectives for 2010 were established for EPS and cash flow for all executives, including the CEO and other NEOs. For executives responsible for an operating unit, including Messrs. Carne and Wright, performance objectives also included unit-specific targets for both EBIT and cash flow based on the Company's approved operating plan and budget. The Committee chose EPS and cash flow because the Committee considers them to be principal indicators of financial performance and principal drivers of stockholder value. The Committee chose EPS for officers responsible for an operating unit to align them with the Company as a whole, while adding unit EBIT and cash flow to ensure a portion of their incentive compensation would be based on the performance of their specific unit. The EPS target was $2.01 to $2.23 per share and the corporate free cash flow target was $190 million to $210 million. These 2010 targets were based on the approved operating plan and budget for 2010. The Committee decided that unusual items such as stock repurchases, significant acquisitions and restructuring costs would not be given effect when calculating EPS for MICP purposes. The Committee considers that these items do not reflect actual performance when implementing our operating plan and budget.

        In addition, the Committee also added performance objectives for each of the executives, including the CEO and other NEOs, in support of the Company's Business Transformation Program, a program for the strategic transformation of the Company's processes and systems to better align them with its businesses. Performance was measured against certain specified implementation milestones. Additionally, in prior years, the Committee established a Return on Equity ("ROE") hurdle of at least 7%. If the hurdle is not met or exceeded, any bonus payment otherwise earned for all participants would have been reduced by 50%.

         2011 Performance Objectives.    For 2011, the Committee again chose EPS and cash flow as the financial performance objectives for all corporate executives, including the CEO and other NEOs, and EPS and operating unit EBIT and cash flow for executives responsible for operating unit performance, for the same reasons they were chosen as the 2010 performance objectives. The EPS target for 2011 is $2.65, which is consistent with the earnings guidance the Company has publicly provided. In place of free cash flow, as has been used in the past for a corporate measurement, cash flow from operations will be used in 2011. This change was made in order to remove the impact of the timing of capital expenditures and any inducement to delay such spending. The Committee also set performance goals for implementation of the Business Transformation Program begun in 2010, and maintained the 7% ROE hurdle.

        Weighting of Performance Objectives and Setting Achievement Levels.     For 2010, the Compensation Committee weighted the EPS, free cash flow and Business Transformation performance goals for corporate executives at 60%, 20% and 20%, respectively, to ensure management is focused on both earnings and cash generation. For executives with operating unit responsibilities, the Committee weighted the goals at 20% for EPS, 40% for unit EBIT, 20% for unit cash flow, and 20% for achievement of Business Transformation implementation milestones. For 2011, the Committee weighted EPS at 60%, cash flow from operations at 20%, and achievement of Business Transformation implementation milestones at 20% for corporate executives, and, for executives with operating unit responsibilities, weighted EPS at 30%, unit EBIT at 30%, unit cash flow at 20%, and achievement of Business Transformation Program implementation milestones at 20%.

        Calculating Performance Level Achieved.     For both 2010 and 2011, the Compensation Committee established the percent of target award that could be earned at different performance levels. Minimum, target and maximum payout levels are set out below. As mentioned in the Summary, for 2011 the

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Committee raised the performance level that must be achieved for maximum payout and did away with a range for target performance.

        The maximum amount that can be earned under the MICP for both 2010 and 2011 is capped at 200% of target bonus even when performance exceeds the maximum. Under the MICP, no additional sum can be earned or "banked" for subsequent years.

        Certifying Performance.     At its February meeting, following the completion of the Company's financial statement audit, the Committee verifies and certifies the Company's and each unit's actual performance against the established goals.

        The Compensation Committee certified the achievement of actual performance against performance objectives, and the resulting payout attainments under the MICP, for corporate executives and the executives of the groups for 2010, as follows:

        Under the terms of the MICP, the Compensation Committee has the authority to exercise discretion to adjust an NEO's award down from the established target award, based on individual performance. The Committee made no discretionary adjustments to any NEO's award for 2010.

        Long-Term Incentives.     As noted above, our executive compensation program is weighted to long-term equity awards rather than cash compensation. The Committee's intent is to align compensation of executives and other key management employees with the interests of our long-term stockholders by providing incentives tied to the long-term success of the Company and increases in stockholder value.

        Our long-term incentive program is administered under our stockholder approved 2005 Equity Incentive Plan. The Compensation Committee, after discussions with the Committee's independent compensation consultant, determines the target long-term incentive grant value for the aggregate long-term incentives to be granted to the executive officers as a group and individually. The Committee makes its determinations giving consideration to (i) the grant practices of our peer group companies, which are contained in the independent compensation consultant's annual competitive review, (ii) industry grant practices in general, (iii) the percentage of dilution and value to be transferred, and (iv) the "burn rate" or percentage of outstanding shares that would be used.

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        For 2010, the Committee targeted 40% of the long-term incentive target grant value in stock options, 40% in PRSUs, and 20% in RSUs. For 2011 the Committee changed the mix of long-term incentives to 50% stock options, 30% performance awards, and 20% RSUs. The Committee re-balanced the mix in order to place more emphasis on absolute long-term appreciation of stockholder value. Individuals may be granted more or less than the target amounts for their positions, based on individual performance, past grant history, employment-retention considerations, internal equity, and future promotability.

        Stock Options.     Awards of stock options are intended to make a portion of executive officers' total direct compensation contingent on long-term stock price appreciation. Additionally, these awards provide executives an opportunity to earn equity ownership. They also provide a means of maintaining competitive levels of total compensation. In October 2010, each executive officer, including the NEOs, received an award of stock options for 2011. The number of options for each individual award was determined by taking 50% of the long-term incentive grant value targeted for that individual and dividing it by the calculated value of a Company stock option.

        The exercise price for all our stock option awards, including those for 2010 and for 2011, is equal to the closing share price on their date of grant.

        The Compensation Committee has historically approved annual awards of stock options to be made effective the following business day at its fall meeting, scheduled at least one year in advance of the meeting. The Committee formally adopted this method of selecting the grant date for the annual awards in 2007. The Committee prefers this "mechanical" approach to selecting the grant date, rather than a "discretionary" approach, as it avoids having to make arbitrary judgments regarding timing of awards. To the extent newly hired or promoted executives receive an initial award of stock options, such options are priced at the closing price on a date no earlier than their actual start or promotion date.

        Stock options vest over a three-year period, with one-third of the options vesting per year, beginning on the first anniversary of the grant. Stock options have a seven-year term and, subject to stockholder approval of Proposal 4 to be voted on at the Meeting, stock options may have up to a ten-year term, beginning with those awarded in 2012. For treatment of vesting upon certain termination events such as retirement or death within the three-year vesting period, see the discussion following the Grants of Plan-Based Awards table on page 34.

        Restricted Stock Units.     Awards of RSUs are intended to encourage and promote retention. The 2011 RSU awards for our executive officers, including our NEOs, require that the Company generate more than $50 million of net income in 2011 as a condition to the RSUs being earned and eligible for vesting. The number of RSUs for any individual award was determined by taking 20% of the long-term incentive grant value targeted for that individual and dividing it by the closing price of the Company's stock on the date of grant. The RSU awards for 2011 will vest over a three-year period, with one-third vesting per year, beginning on the first anniversary of the grant. For treatment of vesting upon certain termination events such as retirement or death within the three-year vesting period, see the discussion following the Grants of Plan-Based Awards table on page 34.

        Performance Awards.     Grants of PRSUs can be earned only by performance against established goals and vest three years from grant date. These awards are intended to serve two purposes: (1) encourage and reward performance and (2) assist in retention of key employees. Both the performance and continued employment requirements must be satisfied in order for the executive to earn the payout of the award.

        For both 2010 and 2011, the target value of these awards is 30% of each officer's target long-term incentive grant value. In the case of the PRSUs approved by the Committee in October 2010, and granted effective January 1, 2011, the target number of PRSUs subject to any individual award was determined by dividing the value of the award targeted for that individual by the closing price of the Company's stock on December 31, 2010. The actual number of PRSUs that could have been earned by performance in 2010, and the actual value of the award, ranged from 0 to 200% of the target value, and were dependent on the

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performance of the Company during 2010 against the 2010 MICP performance goals set by the Committee for corporate officers. As determined by the Committee, the 2010 awards were earned at 133.4% of target. The actual number of PRSUs that can be earned by performance in 2011, and the actual value of the award, also range from 0 to 200% of target, and are dependent on the level of performance of the Company against ROIC goals over a three-year period. The percentage performance against each year's target will be averaged to determine the percentage of the award, if any, actually earned.

        The PRSU awards approved by the Committee in November of 2009, granted effective January 2010 and earned by 2010 performance are included in the NEO's 2010 Compensation and are reported in the "Grants of Plan-Based Awards in Fiscal Year 2010" table on page 34. The PRSUs approved in October 2010, that can be earned by 2011 performance, were granted effective January 1, 2011 and are, therefore, not included in the NEO's 2010 compensation, but will be reported in the 2012 Proxy Statement.

        The vesting of any PRSUs earned is subject to continued employment. PRSUs vest, to the extent earned, three years from date of grant. Accordingly, the PRSUs approved for 2010 performance will vest, to the extent earned, in January 2013, and those for 2011 will vest, if and to the extent earned, in 2014 following certification of 2013 financial performance by the Committee, provided the recipient is continuously employed by the Company through the vesting date. For treatment of vesting upon certain termination events such as retirement or death, see the discussion following the Grants of Plan-Based Awards table on page 34.

        Benefits, Retirement Programs and Perquisites.     We provide our executive officers with benefits and perquisites that the Committee has concluded are reasonable to assist in attracting and retaining qualified executives and, in the case of perquisites, for their convenience and safety. The Committee reviews each year the appropriateness of both the nature and type of benefits and perquisites, and the value and cost thereof.

        Benefits.     We provide our executive officers with the same health and welfare benefits that are broadly available to our U.S. non-union employees, and provide our executive officers, including our CEO and NEOs, no other benefits, programs or special features.

        Retirement Programs.     We provide the following two plans to our executive officers, both defined contribution plans. We do not provide defined benefit plans to our executive officers. Mr. Carne is a participant in the pension scheme provided to our U.K. employees, but his participation was frozen from the time he transferred to the U.S. in 2004. In addition to our Retirement Savings Plan, which is a qualified deferred compensation plan under Section 401(k) of the Internal Revenue Code ("Code") and in which all U.S. employees, including executive officers, who meet the age, service and other requirements of the plan are eligible to participate, we offer a deferred compensation plan to our more highly compensated employees, including our executives.

        Our Deferred Compensation Plan is a nonqualified deferred contribution plan. It is designed to allow deferral of income from base salary and annual bonus and Company contributions that could have been made under our Retirement Savings Plan but for IRS limitations on deferrals of compensation into a tax-qualified plan. There is no "above-market" interest credited on any deferred compensation, as defined for proxy-reporting purposes.

        Perquisites.     In 2010, our executive officers, including the NEOs, were eligible to receive financial planning services and reimbursement for country, luncheon and fitness club dues. The Committee decided in 2010 to discontinue dues reimbursement for our more highly compensated executive officers, including our NEOs, beginning in 2011. The Committee believes it is in the interest of the Company to assist executives in handling their personal finances, particularly tax filing obligations, to prevent them from being a distraction to the executive or embarrassment to the Company. Executive and Senior Vice Presidents and the CEO are eligible to use Company-leased aircraft for personal travel, provided they

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reimburse the Company for the incremental operating cost to the Company of any such use. There are no tax gross-ups for any reported income related to such perquisites.

        The cost to the Company of all benefits and perquisites provided to executive officers is included in the Committee's independent compensation consultant's competitive analysis and in the annual "tally sheet" presentation to the Committee on total compensation paid to executives.

Part V — Other Matters Impacting Our Executive Compensation

        Clawback of Incentive Compensation.     The Committee adopted an executive compensation clawback policy, and plan amendments to make this policy enforceable, in 2009. Pursuant to this policy and the plan amendments, if any executive officer commits fraud or intentional wrongdoing that results in a required financial restatement, our Board has the right to recover incentive and performance compensation paid or awarded within the past five years to such executive officer for the year restated, as well as for the two years prior to the year restated.

        Stock Ownership Requirements.     In addition to stock ownership guidelines for directors set out in "Corporate Governance and Board of Directors Matters — Stock Ownership Guidelines" on page 17 of this Proxy Statement, the Company has stock ownership requirements for its executives and other key employees. Within three years of being appointed an executive or other key employee of the Company, or being promoted to a position requiring increased ownership, the executive or employee is required to directly own Common Stock having a market value or cost basis, whichever is higher, equal to at least the following multiple of his or her base salary:

        All executive officers meet or exceed their ownership requirement or are within the three-year period given to achieve compliance. The ownership interests of the NEOs individually, and executives as a whole, are set out in "Security Ownership of Management" on page 45 of this Proxy Statement.

     Employment, Severance and Change-in-Control Arrangements

        Employment Contracts.     We have no employment contracts with any of our executive officers.

        Executive Severance Policy.     The Company has an Executive Severance Policy for all executive officers, including the NEOs. The Policy provides for salary continuation for 12 months for a covered executive if such executive's employment with the Company is terminated by the Company for any reason other than cause. Participation in the annual incentive plan is prorated through the last day of employment and determined based on achievement of the goals and objectives established for the applicable year, but no entitlements are earned during the severance period. The amount these payments would have been had any of the NEOs been terminated for any reason other than cause on December 31, 2010 is set out in the "Payments Under Executive Severance Policy" on page 39 of this Proxy Statement.

        We provide executive severance because senior level employees, to a greater extent than other salaried employees, serve at the pleasure of the Company and are "at-will" employees. This policy recognizes the impact on individuals of the Company's need and ability to be able to freely make changes

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at the executive level, and the relatively more difficult employment transition that higher-paid employees have when terminated with possibly little or no notice.

        Change-in-Control Agreements.     The Company has change-in-control agreements with 9 executive officers, including Messrs. Moore, Sledge, Carne, Lemmer and Wright. Payment under these agreements would only be made were the executive officer to be terminated in connection with a change in control (i.e., "double trigger"). The agreements are described and the sums that would have been payable had an NEO been terminated on December 31, 2010, in connection with a change in control are outlined in "Payments Upon Termination In Conjunction With Change In Control" on pages 38-42 of this Proxy Statement.

        We recognize that, as is the case with many publicly-held corporations, the possibility of a change in control may arise and that such possibility, and the uncertainty and questions it may raise among our executive officers, may result in the departure or distraction of one or more of them to the detriment of the Company and our stockholders. Since we consider the establishment and maintenance of a sound and vital management team to be in the best interests of the Company and our stockholders, the Compensation Committee has determined that appropriate steps be taken to assure the Company of the continuation of service by certain executive officers, and to reinforce and encourage their attention and dedication to their assigned duties without distraction in circumstances arising from the possibility of a change in control. The Committee believes it important, should the Company or our stockholders receive a proposal for or notice of a change in control, or consider one itself, that our executives be able to assess and advise the Company whether such transaction would be in the best interests of the Company and our stockholders, and to take such other action regarding the transaction as our Board of Directors determines to be appropriate, without being influenced by the uncertainties of their own situation.

        We also believe that entering into change-in-control agreements with some of our executive officers has helped us attract and retain the level of executive talent needed to achieve the Company's goals. The elements of the severance benefits and the amounts of each were approved by the Committee at the time the agreements were entered into, or most recently modified, based on the Committee's assessment of what was appropriate and competitive at that time. As a result, in prior years the Committee reduced the severance benefits provided by our change-in-control agreements by eliminating equity grants as one of the elements of payment upon a change-in-control and reducing the annual incentive bonus portion to the larger of any award earned in the last three years or target award, a decrease from the maximum award that could be earned. The committee eliminated tax gross-ups in agreements entered into during or after 2009. Of the nine change-in-control agreements outstanding, two have been entered into since this policy decision.

        Tax Implications of Executive Compensation.     Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1 million on the amount of annual compensation that may be deducted by the Company in any year with respect to the NEOs. Certain performance-based compensation approved by stockholders is not subject to this deduction limitation, and as a result, annual incentive bonuses paid pursuant to our Management Incentive Compensation Plan, stock options, performance awards and, beginning with those made for 2011, RSU awards granted under our Equity Incentive Plan generally will qualify as performance-based compensation and should be deductible.

        The Committee is mindful of the limitation and has structured the various elements of our executive compensation to fall within the limit or the exception. The Committee and/or the Board of Directors, however, may from time to time, in circumstances it deems appropriate, award compensation in addition to our annual stock option and RSU awards that may not be deductible in order to, in its or their judgment, compensate executives in a manner commensurate with performance and the competitive market for executive talent.

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Summary Compensation Table

        The following table sets forth the compensation earned for services rendered to the Company for the fiscal year ended December 31, 2010, by Mr. Moore, our CEO; Mr. Sledge, our Chief Financial Officer; and the other NEOs. Mr. Wright's data for 2008 is not included because Mr. Wright did not meet the criteria for inclusion in the Table until 2009.

        The differences in the compensation of our named executive officers result from the fact that the Company's compensation philosophy is to pay competitively by position. In order to determine competitive levels, the independent compensation consultant, at the direction of the Compensation Committee, benchmarks each position against employees holding similar positions in our peer group and in the manufacturing industry in general. The Company's compensation policy and its benchmarking practices are explained in the "Compensation Disclosure and Analysis" ("CD&A") section of this Proxy Statement.

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Grants of Plan-Based Awards in Fiscal Year 2010

        The following table provides information on non-equity incentive plan awards, stock options and Restricted Stock Units granted, and the grant date fair value of these awards.

        The RSU awards approved by the Committee in October 2010, that can be earned by 2011 performance, were granted effective January 1, 2011 and are, therefore, not included in this table, but will be reflected in the "Grants of Plan-Based Awards in Fiscal Year 2011" table of the 2012 Proxy Statement.

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        Stock options normally vest at a rate of one-third per year over the first three years from date of grant and performance-based RSUs normally vest three years from date of grant. The impact of termination on vesting and exercisability of stock options, as well as the vesting of restricted stock grants, is set out below:

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Outstanding Equity Awards at Fiscal Year-End

        The following table presents information about outstanding stock option awards classified as "exercisable" and "unexercisable" as of December 31, 2010, for our CEO, Chief Financial Officer and other NEOs, as well as RSU awards that were not yet vested as of December 31, 2010. The RSU awards approved by the Committee in October 2010, that can be earned by 2011 performance, were granted effective January 1, 2011 and are, therefore, not included in this table, but will be reflected in the "Outstanding Equity Awards at Fiscal Year-End" table of the 2012 Proxy Statement.

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